AUD/USD price Analysis: Descending channel resistance continues to cap ahead of NFP

• AUD/USD reversed an intraday dip to the 0.6800 mark amid a modest intraday USD pullback.
• The upside remains capped near a resistance marked by the top end of a descending channel.
• Investors now seem to have moved on the sidelines and await the US monthly jobs report (NFP).

The AUD/USD pair attracted some dip-buying near the 0.6800 mark on Friday and has now recovered its modest intraday losses. The pair was last seen trading in the neutral territory, around the 0.6830 area, as traders now await the release of the US monthly jobs data for a fresh impetus.

The US dollar surrendered a major part of its intraday gains to a fresh two-decade high amid some repositioning trade ahead of the NFP report. Apart from this, a generally positive tone around the equity markets undermined the safe-haven buck and offered support to the risk-sensitive aussie.

From a technical perspective, the AUD/USD pair, so far, has failed to capitalize on this week's rebound from a two-year low and the upside remains capped near a descending trend channel resistance. The said barrier, currently around the 0.6855-0.6860 region, should now act as a pivotal point.

This is closely followed by the 0.6900 mark, which coincides with the 100-period SMA on the 4-hour chart, which if cleared would suggest that the AUD/USD pair has formed a bottom. This, in turn, could trigger a short-covering move and lift spot prices towards the 0.6955-0.6960 supply zone.

On the flip side, the 0.6800 mark now seems to have emerged as immediate support, below which the AUD/USD pair could slide back to the 0.6765-0.6760 area. Some follow-through selling would pave the way for a slide towards the ascending channel support, currently around the 0.6715-0.6710 area.

A convincing break through the latter, leading to a subsequent fall below the 0.6700 mark would be seen as a fresh trigger for bearish traders and pave the way for additional losses. The AUD/USD pair might then accelerate the fall towards the next relevant support near the 0.6655-0.6650 region.

AUD/USD 4-hour chart

Key levels to watch